Cazenove Absolute Equity (CAEL): BNP Paribas Arbitrage has bought over half a million shares in the hedge fund to take its stake to almost 15%. BNP has been actively increasing its position since the summer.
Charter European Trust (CPE): Shareholders of the fund have defeated Midas’s resolution to abolish the scaling-up voting provisions in the share scheme for retail investors investing in Charter European’s shares operated by Alliance Trust Savings Limited. Shareholders should now focus on the board’s proposal to wind up the company and take cash, or units in Jupiter European.
Gartmore European (GEO): Following Gartmore’s acquisition by Henderson and changes to the investment objective and policy, the board is proposing a number of changes. Firstly, the name will be changed to Henderson European Focus Trust plc. Further, subject to shareholder approval, the management fee will now be calculated on net assets, rather than total assets less current liabilities (other than borrowings for the purpose of the investment). They also propose changes to the performance fee structure and benchmark--FTSE World Europe ex UK Index. A performance fee of 15% will be levied, subject to a hurdle of 1% outperformance of the benchmark, and subject to a carry forward of under or outperformance from previous periods. There will also be a cap on total fees of 1.75% of net assets. Finally the board is proposing a change to the buyback policy to allow a more flexible approach to keep the discount above the sector average. We think the proposed new fee structure is much improved .
FRM Diversified Alpha GBP (DIVA): The board of the hedge fund is proposing the liquidation of the company. The global fund of hedge funds was launched in June 2008 and has struggled to narrow its discount since the financial crisis that year. The proposal is subject to shareholders’ approval at the EGM on December 5.
Murray International (MYI): The international equity company is making a bonus issue of B ordinary shares in respect of its second interim dividend in its financial year.
Northern Investors (NRI): The U.K. private equity company is continuing its realisation of assets and plans to start returning cash to shareholders through a tender offer. Details will be released ahead of the AGM in December.
LMS (LMS): The global private equity company has announced its intentions to wind up the fund and realise all assets in an orderly fashion. This will be put to shareholder vote at the EGM at the end of November. The fund has struggled to bring in its discount since the end of 2008, when it reached nearly 60%.